(Updates with closing prices, USDA crop ratings) By Julie Ingwersen CHICAGO, Aug 13 (Reuters) - U.S. new-crop soybean futuresfell more than 2 percent on Monday as improving weather in theMidwest crop belt brightened crop prospects and helped trigger around of fund long liquidation. Wheat extended losses to 6 percent over two sessions andfell to a near three-week low as fears of shortfalls in keyglobal growing areas eased. Corn futures fell 2 percent on pressure from the approachingU.S. harvest and profit-taking from last week's record-highprices, although worries about supplies following this summer'shistoric drought underpinned the market. Soybean futures at the Chicago Board of Trade tumbled oncooler temperatures and light rains in the Midwest that couldboost prospects for late-planted soybeans. "How much improvement we will get, we don't know, butprobably in the deep southern areas and the northern areas thecrop can benefit from the recent rainfall," said Anne Frick withJefferies Bache in New York. "I would suspect we are going to see an increase in cropcondition ratings tonight, and I think that is being reflectedin the prices," Frick said. After the close, the U.S. Department of Agriculture said 30percent of the U.S. soybean crop was rated in good to excellentcondition, up 1 percentage point from the previous week and inline with a pre-report Reuters poll of analyst expectations.

Ratings for corn, which have fallen for nine straight weeksdue to the worst drought in 56 years, were unchanged at 23percent good to excellent -- also in line with tradeexpectations. At the CBOT, most-active November soybeans settleddown 43 cents, or 2.6 percent, at $16.00-3/4 per bushel. September wheat fell 28-1/2 cents, or 3.2 percent, to$8.56-3/4 a bushel. Benchmark December corn ended down 17cents, or 2.1 percent, at $7.92-1/4 per bushel. Commodity funds were net sellers of 16,000 contracts ofcorn, 12,000 of soybeans and 7,000 of wheat, trade sourcesestimated. Soybeans set back in spite of a big cut in the U.S.Department of Agriculture's U.S. 2012/13 soybean production andstocks estimates on Friday. "We had a tepid response on Friday to the bullish numbers,and that says the market might be a little tired," Frick said. The approach of the corn harvest, coupled with anecdotalreports that combines have already begun rolling in scatteredareas of the Midwest, pressured corn futures. CBOT December cornhas fallen nearly 7 percent from its peak of $8.49, the all-timehigh for any corn contract, set on Friday. USDA did not issue a figure on the progress of the cornharvest but said it expected to issue its first such figure inits next weekly report. The government said 10 percent of thecorn crop was mature, ahead of the five-year average of 3percent. "With harvest around the corner, or actually starting insome places, there is no sense of urgency to bid up foranything," said Bill Gentry, a broker with Risk ManagementCommodities in Lafayette, Indiana. However, the market found underlying support and bounced offsession lows, supported by the USDA's forecast on Friday forU.S. corn inventories to drop to a 17-year low by next summer. The USDA last week slashed its estimate of U.S. cornproduction and cut its forecast of U.S. 2012/13 corn endingstocks to 650 million bushels, the smallest since 1995/96. "We will continue to find strong underlying support off thetight balance sheet," said Shawn McCambridge with JefferiesBache in Chicago.

The aggressive stance of the USDA reflected the severity ofthe damage from a drought centered in the U.S. Midwest farmbelt, which grows 75 percent of the country's corn and soy cropsthat are used for food, feed and biofuels. The rally in grain prices has renewed the food-versus-fueldebate centered on the U.S. ethanol mandate, as 40 percent ofthe corn crop will be made into fuel for cars and trucks. France, the United States and G20 president Mexico will holda conference call at the end of August to discuss whether anemergency international meeting is required to tackle soaringgrain prices caused by the worst U.S. drought in half a century.